Throughout this site there are many discussions of economic indicators. This post is the latest in a series of posts indicating facets of U.S. economic weakness or a notably low growth rate.
The level and trend of economic growth is especially notable at this time. As seen in various estimates, the probability of recession has grown significantly.
As seen in the October 2022 Wall Street Journal Economic Forecast Survey the consensus (average estimate) among various economists is for .22% GDP in 2022, .44% GDP in 2023, 1.82% GDP in 2024, and 2.12% GDP in 2025.
Charts Indicating U.S. Economic Weakness
Below is a small sampling of charts that depict weak growth or contraction, and a brief comment for each:
The Yield Curve (T10Y2Y)
Many people believe that the Yield Curve is a leading economic indicator for the United States economy.
On March 1, 2010, I wrote a post on the issue, titled “The Yield Curve As A Leading Economic Indicator.”
While I continue to have the stated reservations regarding the “Yield Curve” as an indicator, I do believe that it should be monitored.
The U.S. Yield Curve (one proxy seen below) is negative and is (all things considered) notably very low when viewed from a long-term perspective. Below is the spread between the 10-Year Treasury Constant Maturity and the 2-Year Treasury Constant Maturity from June 1976 through the December 7, 2022 update, showing a value of -.84% [10-Year Treasury Yield (FRED DGS10) of 3.51% as of the December 7 update, 2-Year Treasury Yield (FRED DGS2) of 4.34% as of the December 7 update]:
source: Federal Reserve Bank of St. Louis, 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity [T10Y2Y], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed December 8, 2022: https://fred.stlouisfed.org/series/T10Y2Y
Average Weekly Overtime Hours of Production and Nonsupervisory Employees: Manufacturing (AWOTMAN)
Various U.S. manufacturing measures continue to indicate growth. However, overtime hours for manufacturing is somewhat subdued by recent-era economic expansion standards and the measure on a Percent Change From Year Ago level has recently gone negative.
Shown below is the “Average Weekly Overtime Hours of Production and Nonsupervisory Employees: Manufacturing” measure (with last value of 3.8 hours through November) last updated December 2, 2022:
Below is this measure displayed on a “Percent Change From Year Ago” basis with value -7.3%:
source: U.S. Bureau of Labor Statistics, Average Weekly Overtime Hours of Production and Nonsupervisory Employees: Manufacturing [AWOTMAN], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed December 7, 2022: https://fred.stlouisfed.org/series/AWOTMAN
Real Average Hourly Earnings
Various measures of (nominal) average hourly earnings continue to show significant growth. However, due to continuing high inflation, Real Average Hourly Earnings continues to decline. Shown below is a chart of earnings measures as seen in The Economics Daily of November 18, 2022 titled “Real average hourly earnings decreased 2.8 percent from October 2021 to October 2022”:
Personal Savings Rate (PSAVERT)
The Personal Saving Rate has been very volatile since 2020, and has now declined to nearly the lowest levels seen in the entire data series.
As seen below, the Personal Savings Rate is now at 2.3% through October 2022, as of the December 1, 2022 update:
source: U.S. Bureau of Economic Analysis, Personal Saving Rate [PSAVERT], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed December 7, 2022: https://fred.stlouisfed.org/series/PSAVERT
As mentioned previously, many other indicators discussed on this site indicate weak economic growth or economic contraction, if not outright (gravely) problematical economic conditions.
The Special Note summarizes my overall thoughts about our economic situation
SPX at 3953.35 as this post is written